2005 California Government Code Sections 8670.53.1-8670.53.95 Article 7.5. Borrowing Authority

8670.53.1.  (a) At any time an oil spill into marine waters has
occurred, and the administrator determines that the costs of
responding to the spill, including costs specified in paragraphs (1),
(2), (3), (4), and (6) of subdivision (k) of Section 8670.48, are
likely to exceed (1) the amount in the Oil Spill Response Trust Fund
not previously encumbered or set aside pursuant to a determination
made by the administrator in accordance with Section 8670.49 and (2)
the responsible party's financial ability, if there is a known
responsible party, the administrator shall notify the Governor.  Upon
notification, the Governor shall request that the federal government
pay the cost for response, containment, cleanup, wildlife
rehabilitation, and payment of damages.  If federal funds are not
available within five days, the Governor shall make a written request
to the Treasurer to borrow and deposit in the fund the amount by
which the estimated response costs, including costs specified in
paragraphs (1), (2), (3), (4), and (6) of subdivision (k) of Section
8670.48, exceed the amount in the Oil Spill Response Trust Fund not
previously encumbered or set aside pursuant to a determination made
by the administrator in accordance with Section 8670.49.
   (b) The Governor, the Controller, the Treasurer, and the
administrator shall immediately take whatever action is necessary and
appropriate to ensure that the state has the ability to borrow the
maximum additional amount necessary to carry out this chapter.
   (c) The party responsible for the spill shall be liable to the
state for all money borrowed under this section, including interest
and premium, if any, and all associated fees, costs, and other
charges incurred by the state in connection with the borrowing,
whether or not all or a portion of the borrowed money has been repaid
through the oil spill response fee or by federal funds.
   (d) No funds available pursuant to this article may be expended
for any activities which result in a net environmental enhancement.
It is the intent of the Legislature that borrowed funds be expended
solely for oil spill response, containment, cleanup, wildlife
rehabilitation, and damages resulting from oil spills.
8670.53.2.  Money borrowed pursuant to this article shall be
expended and repaid pursuant to Section 8670.48.  So long as any
borrowings are outstanding, fees and any other moneys in the fund, to
the extent provided in the resolution of issuance, are pledged to
the repayment of the borrowings.  The pledge shall constitute a first
lien and security interest, ratably with all other prior or
subsequent borrowings unless the treasurer provides in a resolution
of issuance, that any borrowing shall constitute a junior lien, which
shall immediately attach on the fees deposited in the fund, and
shall be effective, binding, and enforceable against the state and
any other person asserting rights therein without need of any
physical delivery, recordation, filing, or other action.
8670.53.3.  (a) To provide funds to pay for costs of an oil spill,
as set forth in Section 8670.48, in excess of money in the fund, the
Treasurer shall make necessary financial arrangements to obtain the
money needed to pay those costs, subject to reimbursement or
repayment from future deposits into the fund.  The financial
arrangements may take the following forms, or any combination
thereof:
   (1) Establishment of a line of credit, letter of credit, or other
standby arrangement with one or more financial institutions,
hereafter referred to as a "standby arrangement," that will permit
the Treasurer to have ready access to money for the purposes of this
article.
   (2) Sale of bonds or notes of the state, hereafter referred to as
"bonds," to provide funds for purposes of this article, to repay any
prior drawings on a standby arrangement, or to refund or extend any
previously issued bonds.
   (3) Borrowing from the Pooled Money Investment Account.
   (4) Any other financial arrangement the Treasurer determines to be
appropriate and cost-effective.
   (b) The Treasurer may enter into any financial arrangement
authorized in subdivision (a) at any time, or from time to time, on a
negotiated or competitive bid basis, as the Treasurer shall
determine to be advisable.
   (c) (1) The Governor shall deliver a written request to the
Treasurer to obtain money pursuant to this article to pay for oil
spill costs, including costs specified in paragraphs (1), (2), (3),
(4), and (6) of subdivision (k) of Section 8670.48.  The written
request shall, to the extent feasible, state both of the following:
   (A) The amount of funds needed each month over the period covered
by the request.
   (B) The estimated income to the fund each month from all sources
which will be available to pay or retire any debt service or other
expenses in connection with obligations issued pursuant to this
article.
   (2) The Governor may submit multiple requests to the Treasurer
with respect to the same oil spill, or with respect to different oil
spills.  On receipt of a written request pursuant to this section,
the Treasurer may draw on a standby arrangement, use any other
financial arrangement, or issue bonds, to provide funds not exceeding
the amounts requested.
   (d)  Upon receipt of a written request for funds from the
Governor, the following shall occur:
   (1) The Treasurer shall convene a meeting of the Pooled Money
Investment Board, subject to subdivision (h) of Section 11125.5, to
obtain the funds through interim borrowing from the Pooled Money
Investment Account.
   (2) The Treasurer shall ensure that the funds will thereafter be
available in accordance with a financing schedule mutually agreeable
between the administrator and the Treasurer.
   (e) This article does not require the Treasurer to borrow more
money than can be repaid from amounts available to the fund for that
purpose.  The Treasurer shall not be required to give effect to an
increase of the fees specified in Section 8670.48.5 until that
increase has actually become effective.  Once effective, the
administrator shall not retract, reduce, or reject the increase
unless the Treasurer certifies to the administrator that the
retraction, reduction, or rejection will not diminish the security
for amounts borrowed under this article.  The amount of borrowing
that can be repaid from amounts available to the fund for that
purpose shall be determined by the Treasurer in his or her sole
discretion, giving due consideration to factors concerning security
for, and marketability of, the bonds or other evidences of
indebtedness that the Treasurer elects to issue for purposes of
complying with this article.
8670.53.4.  (a) The entry into or issuance of any financial
arrangement or bonds pursuant to this article shall be authorized by
a resolution adopted by the Treasurer.  Any financial arrangement or
bonds (1) may be negotiable, (2) may be payable to order or to
bearer, (3) may be in any denomination, (4) shall be payable not
later than 20 years from the date of issuance, (5) may bear interest
at a fixed or variable rate or rates to be determined as provided by
the resolution and payable as provided therein, (6) may be payable on
a fixed date or upon demand of the holder, (7) may be made subject
to the prepayment or redemption  at the option of the state or at the
option of the holder, and (8) may contain such other terms as the
Treasurer may determine to be necessary and appropriate.
   (b) In connection with any financial arrangement or issuance of
bonds pursuant to this article, the Treasurer may obtain or arrange
for any insurance, letter of credit, or other credit enhancement or
liquidity arrangements as the Treasurer determines to be appropriate
and cost-effective, and may enter into any contracts or agreements
for those arrangements not inconsistent with this article.
   (c) Proceeds of the sale of any bonds or drawings on any standby
arrangement or other financial arrangements shall be deposited in the
fund.
8670.53.5.  Any financial arrangements made or issued pursuant to
this article, and the repayment of any such obligations, shall be
special obligations of the state secured solely by the moneys in the
fund.  No financial arrangement issued or made pursuant to this
article shall be or become a lien, charge, or liability against the
State of California or against its property or funds except to the
extent of the pledges expressly made by this article.  Every
financial arrangement made pursuant to this article shall contain a
recital stating that neither the payment of the principal thereof,
nor any interest thereon, constitutes a debt, liability, or general
obligation of the State of California other than as provided in this
article, and neither the faith and credit nor the taxing power of the
state are pledged to the repayment thereof.
8670.53.7.  (a) All bonds issued pursuant to this article are legal
investment for any of the following:
   (1) Trust funds.
   (2) Funds of insurers.
   (3) Funds of savings and loan associations.
   (4) Funds of banks.
   (5) Funds of state agencies, cities, counties, cities and
counties, or other public agencies or corporations.
   (b) Bonds issued under this article are acceptable and may be used
as security for the faithful performance of any public or private
trust or obligation or for the performance of any act, including the
use of notes by banks as security for deposits of funds of the state
and its agencies, or of any city, county, city and county, or other
public agency or corporation.
8670.53.8.  There is hereby appropriated from the fund, without
regard to fiscal year, any and all moneys necessary to pay (1)
principal, (2) interest, (3)  premium, if any, (4) commitment,
standby or availability fees, or charges in connection with any
standby arrangement, other financial arrangement, or bonds issued
pursuant to this article, or (5) any rebate penalty, or other payment
necessary to maintain the federal tax-exempt status of any bonds or
financial arrangement.  The Treasurer shall advise the administrator
and the Controller of amounts annually necessary to pay the
principal, interest, premiums, and fees on obligations issued
pursuant to this article, and those amounts shall not be available
for expenditure for other purposes.
8670.53.9.  Whenever the Treasurer determines that it will increase
the marketability or reduce the cost of obtaining any standby
arrangement, other arrangement, or of issuing any bonds to obtain,
prior to or after sale, a legal opinion as to the validity of the
standby arrangement, other arrangement, or bonds from attorneys other
than the Attorney General, the Treasurer may obtain such a legal
opinion.
8670.53.95.  Section 10295 and Sections 10336 to 10382, inclusive,
of the Public Contract Code shall not apply to agreements entered
into by the Treasurer in connection with obtaining the financial
arrangements authorized by this article.